Let's Talk Money

August 20th, 2023

Episode Transcript

(00:00):
Good morning everyone. My name isMartin Shields. I'm the chief wealth Advisor
at Bouchet Financial Group, and I'mgoing to be your host today for Less
Talk Money. I'm giving my colleagueSteve Bouchet a break, and it's great
to be here with you to answerany questions you may have regarding your funancial
planning or investment management, and Iencourage you to calling with those questions.

(00:22):
You can reach me at five oneeight six nine zero zero nine eight zero.
Now that's a different number than ournormal hotline number, which unfortunately has
not been working over the last twentyfour hours, so again make note of
that it is five one eight sixnine zero zero nine eight zero. I

(00:44):
actually think it's maybe easier to rememberthan the highlight number. So one last
time, five one eight six ninezero zero nine eight zero. So any
question you may have regarding your funacialplanning or investment management, give me a
call, give you some insight.It's great to be here with you.
I was on doing the show yesterday. I think this is probably one of

(01:06):
the first weekends I've done both shows, and as you know, Steve's been
doing the show for twenty eight years. I've been with Steve for eleven and
I've done the show for at leastten plus years, and really I love
doing it. I love an opportunityto take your questions and give you some
insight on things you can do inyour own personal situation, and just have

(01:27):
a chat about economics, finance,and financial planning. What better way to
start your Sunday morning but where it'sa great sunny day to day that we
should have, so hopefully you're goingto get out there and enjoy it.
I was up early. I'm usuallywhen I work out, I work out
in the evening. I'm more ofa night person or evening person when I
work out. But I had someenergy this morning. And one of the

(01:49):
things I like to do that reallyget you going. I can't really run
any more of these days, orplay soccer, basketball, tennis, all
these things I used to do,but to get in shape, literally either
a run or walk hills. AndI did that this morning. I Ransom
hills. And I'm telling you youwant to get in shape, you just
do that. And if you can'trun it, just walk it and it

(02:12):
will get you going. So I'mready to get this day going and talk
to you about some thoughts on themarkets and give you some insight on things
you can do in your own personalfunctional planning situation. So this week continued
our downward stretch in the market,the SMP and the NASDAC. We're down
about two percent. And really thisdownward trend started around very permitting the beginning

(02:39):
of August, so you know,really through most of the year it kind
of been trending upwards and really reallya low volatility environment. And we always
say that when that happens, don'tget too comfortable with it, because that
can usually be an indicator that therewill be some volatility. So this is

(03:00):
part and parcel for the market.You know, when sometimes when it gets
ahead, I'm going to say aheadof itself, when it really realies strong
like it has this year, thatit takes a step back and nothing to
get concerned about. But you know, there are a number of things going
on from an economic perspective, andwe had continue to have some good news

(03:22):
from the inflation front. We talkedabout that CPI consumer price index is trending
lower, which is what the FederalReserve is looking to have happen. They're
looking to move to the two percenttarget. While at the same time,
the economy continues to show resiliency inthe labor markets, in the real estate
market, and just broadly speaking,there's a lot of strength. Corporate earnings

(03:45):
continue to be pretty strong, andthe consumer is very strong. And we've
talked about this, So the consumermakes up about seventy to seventy five percent
of the US economy, and retaildata came out this past we can show
a very strong consumer spending for themonth of July. Now, we had
two consumer heavyweights come out this week, Walmart and Target, and they actually

(04:11):
had different guidance that they had soTargets guidance was not very positive. They
said that their earnings were not asstrong as they would have expected and gave
lower guidance for the rest of theyear, whereas Walmart came out with really
the opposite and showed a lot ofstrength in their guidance. And I think,
you know, you talk about itmore anecdotal everything that we see in

(04:33):
talking to with our clients, stilla lot of strength out there. We
you know, different circumstances where individualsmay have lost their job, but they've
been able to find new jobs andin many cases for higher salaries than they
had before. And so in general, as we see it, whether it
be a real estate or the labormarkets, or just business in general,

(04:55):
it continues to be very strong.And this is where you know, as
I look at this, we couldbe in an environment where interest rates kind
of starting trend to more of ahigher level. So you know, the
low low rates we saw two orthree years ago and even over the last
ten years, we get we maystart moving back to a little bit more
of a standard level for interest ratesand move beyond that really low interest rate

(05:19):
environment that we saw over the lastten years or certainly in the last three
years. The ten year US Treasuryhit four point three percent this past week,
and you have to go back allthe way to two thousand and seven
to find a level where it wasthat low I'm sorry, that high.

(05:39):
So really, you know, quitea raise in that. And you know,
we've been talking about this all lastyear. We were out of bonds
because as you have interest rates riseso dramatically, which is what they did
since two thousand and twenty, that'sa negative to bond holders. And we
saw that in the performance of bondslast year, where the Barclay's aggregate bond

(06:03):
index was down almost as much asstocksworth it was down almost around seventeen percent,
And so being out of bonds wasvery beneficial for our clients in their
portfolio. We had moved into alternativeinvestments that had done much better both in
twenty one and in twenty twenty two, and we still have alternative investments in

(06:25):
our portfolio, but we're starting aroundNovember of last year, when the teen
year US treasury hit four point twopercent, we started to move back into
bonds and start actually in many casesby individual bonds for our clients. Now
when we do this, we're nottaking on a lot of risk, right,
so we always talk about this ingeneral way that we view the bond

(06:46):
portion of the portfolio for our clients, it's about capital preservation. So we're
looking to preserve capital and we're alsolooking to get income from that part of
the portfolio. And you know,if you look back over the last ten
years, being a bond investor hadbeen beneficial to the extent that rates have
been declining, and declining rates isa good thing as far as the value

(07:08):
of your bonds, but as faras income is concerned with your bonds,
it hasn't been a good thing.But now as we look at it,
if we can go out and buyindividual bonds, both with treasuries or investment
grate bonds that are yielding anywhere fromfour and a half to five and a
half percent, depending on the maturityof those bonds, that's that's a very

(07:30):
good thing. That's a that's agreat thing for at least a more conservative
part of a client portfolio. Andyou know, again, it's about giving
our clients guidances to what is theright allocation for them given their risk tolerance
and given their cash flow needs.And that's where it's so important when when
we're working with our clients. Youknow, the portfolio management is an important

(07:54):
part, but just as important isthe funancial planning guidance we give our clients.
And we've talked about it before.Really you know, I say our
firm and our advisors were in thedecision making business. And what I mean
by that is so often with ourclients they're going through multiple decisions, right,
you know everything. You know,what should I be doing with my

(08:15):
company benefits? What should I bedoing with my business? How should I
handle decisions with my family with finances? Should I be buying this house all
these things, and we're there astheir personal CFO, as their investment fiduciary
to give them guidance on them.And that's what I love about this business
and working with our firm is youknow, I come from a background of

(08:37):
corporate finance. I used to workwith large corporations making these decisions and they
were in bigger numbers and on afew extra zeros and I did it both
in the US and domestically. Sothis is these decisions are smaller in stake
as far as numbers, but they'reactually more important. Right so, as
these people are making these decisions,to have the right guidance is invaluable and

(09:00):
to meet there's more i'm gonna saypersonal worth and value in this role than
perhaps working for a large corporation.Uh. You know, when we work
with our clients and we're able togive them a guidance and help them make
successful decisions, that that is soI think it's invaluable. And you know
that's why we have long term relationshipswith our clients that you have. Clients

(09:22):
have been with our firm for twentyfive thirty years and that means so much.
And we now work with multiple generationsof clients. So we started with
one set of clients and then startedworking with their children and they became successful
individuals. And now we're working withthe grandchildren of those generations. And you

(09:43):
know, that's why we talk aboutjust the importance of the guidance we give
to individuals and what that means.And I want to go into that and
talk a little bit about about whatthat means. But before I do,
again, if you have any questions, the hot number. Hotline is not
working the normal one is, sowe have a new one here. Zach

(10:03):
put it together. It is fiveone eight six nine zero zero nine eight
zero. Again, that's five oneeight six nine zero zero nine eight zero.
So just talk about some of thethings that as we're working with our
clients, how we approach it right. So the way I kind of break

(10:24):
this down, there's three different areas. One is we're educators, right.
We want our clients to be educatedinvestors and educated from a financial perspective,
and it gains for each client.It varies. Some clients, boy,
they want to dig in and godeep and we love that's, let's do
that. Others want to stay alittle bit more high level as they make
their decisions. But at the endof the day, we always say,

(10:48):
one of the best investors is aneducated investor. Right. They know what
it means to be invested in themarkets from a long term perspective, whether
it be stocks or bonds or anyany asset class that we use. And
they also understand the basic elements asthey make decisions from a financial planning perspective.
So again, our goal is toeducate them. We're educators. The

(11:09):
next thing are we're counselors, right, So you know as you make these
decisions. You know, I thinkpeople don't realize how much financial decisions can
be based on psychology and emotions.Whether it be with work, whether it's
with your spouse, whether it's withyour kids, grandkids, all these things
I get tied up together. So, without a doubt, a lot of

(11:31):
what we do is we're counselors toour clients to help them discern what is
important in these decisions, how it'sgoing to impact them, and really there's
so much. So many times ourclients have been successful because they have really
managed their spending. They have beenable to really put a lot of money

(11:52):
away, make all the right decisions. Sometimes as they get close to retirement,
they're in the financial stages of beingindependent, did earn and needing money
for the portfolio. We've actually almostkind of have to change their mindset that
it's okay to spend that money,right. You know, that's that's hard
to do when you work all yourlife forty years plus and you're working hard

(12:13):
to build up that nest egg thatyou finally have that money available to get
guidance to go ahead and spend thatmoney, uh, and to spend it
in a way that is smart,and you know, not to in a
way that you're going to go throughthat money, but you know, in
a manner that allows you to enjoylife and do the things you want to
do. Because as our tagline is, our marketing line is health, wealth

(12:37):
for life, and that is soimportant that health is first because we always
say, if you don't have yourhealth, I don't care how much money
you have. Uh, it's notgoing to do you any good. You
can't bring it with your folks.So the health piece is first. So
when you have your health, uh, and you and your spouse are in
a good position from a financial perspectiveto get out there and enjoy life that's

(13:01):
just so important and it's a bigpart of what we do. I'm going
to go out to the third part, but I want to go to the
phone lines we have, Paul,Paul, you there. Yeah, we
want to forewarning. I'm a CPAand I do a lot of work on
my own. I don't really havean advisor. So put these numbers in

(13:22):
the context of your statement. Atfour and a half to five and a
half bonds, the first question Ihave is are you buying the municipal bonds
that are taxable in that at all? There's some bonds out there that are
taxable municipal bonds. I just wantto eliminate things and get to the core
issue. Yeah, I mean ingeneral, if we're buying municipal bonds,

(13:46):
they're going to be tax free,both if we can, both with New
York State and federally. So,so are those the focus of these four
and a half to five and ahalf percent? No? No, if
you're getting four and a half tofive percent, where again, as I
mentioned to you, we're looking forI'm being very specific because I have a

(14:09):
calculator. I do this every day. It's not you. I'm holding people
accountable on radio shows for what theysay, not just you on horse racing,
on a lot of subjects. Soright now, the ten year treasury,
all round it to four two,even though yesterday somebody set four to
five. We can argue the aftertax return on that with no state tax

(14:31):
adjusted would be maybe almost four anda half. I think you would agree
in New York State, No,assuming a five percent rady. Okay,
So would you buy a ten yeartreasury because it has no state tax right
now at four point two? Sure? If it met that clients needs from
a liabilty perspective, meaning that theywere willing to hold that bond for that

(14:52):
long. Yeah, and in abond ladder? Sure? Right? Okay,
is that what you're doing because yousaid four and a half? Is
that part of your strategy right now? In general it depends on the It
depends on the client. But ifwe can get it, whether it be
a ten year strategy, is therea question? What's your question? Where

(15:16):
are you getting five and a halfand when you put your fees on top
of it, at the best casescenario, it's four and a half.
That's all I'm trying to get at. Like people throw at numbers on all
these shows, and I know allthese friends I have are saying I just
want to get four percent because they'vebeen duped into the sixty forty portfolio and

(15:39):
the withdrawal rate and you'll never growbroke strategy. And then I get the
AAI Journal and it says it's reallyoverstated. It's probably more like three.
You know all that stuff. Iknow this stuff and you do. So
I'm trying to get at when peopleare on the radio and say things five
and a half percent is a fairlyattractive rate. And I have a friend

(16:02):
who's fired from tia Kreft and he'sgetting well beyond that. Of course,
these are hold situations too, andif I could get five and a half
percent with no fees, somewhere ina triple A or double I'm not perfect
on bond ratings. I want toknow what to buy. That's what I'm
doing in Okay, great, WellI don't let you go ahead. Well,

(16:25):
i'll answer your question offline. SoPaul's question as to what does this
look like? Right, if you'regoing to get a you know, four
and a half five five and ahalf percent yield on that bond, what
does that look like? Well,here's the This is where it's important.
Right. So if he's talking abouta ten year year's Treasury yielding four point

(16:45):
it was four point three, butlet's say four point two four point two
five. That is for a riskfree the US Treasury is going to be
as risk free as you can possiblyget. And that's for ten years.
Now, when you go to ashorter maturity anywhere from two years, three
years, five years, you canstart moving up as far as the yield,
right, So the two two yearsyielding much more three three months.

(17:10):
So as we build out bond laddersfor our clients, we're looking at multiple
maturities, right, not just one, but we're gonna be looking at shorter
maturities and longer maturities. Because thething that remember is and when you have
a bond portfolio, as those bondscome due, you're going to have to
buy another bond, right. Sothe goal here is that we have bonds

(17:32):
that mature over multiple time periods,everything from very short time periods where you
can get much higher yields, tolonger ones. And then for where appropriate,
we may utilize investment grade bonds.Right. And so now when you
start moving off of treasuries into investmentgrade bonds, you can get yields.
Again, going a little bit longerout five years, seven years, ten

(17:56):
years, you can go and getyields that will be higher than a US
ty bond. So it just dependson the circumstance. But again for many
of our clients, we are buildingout bond lander portfolios, and this is
something that we, you know,would not have done, certainly three years
ago, or actually since I've beenwith the firm for eleven years, I
know Steve did it back, youknow, probably back into two thousands when

(18:21):
yields were much higher. Right,So there are certain time periods where as
yields get higher, it can bemore advantageous to buy those individual bonds because
now you can lock into those ratesfor a long time period. So again
it's one of these things where wehave individual conversations with our clients to see
what is appropriate for them, whatis appropriate for us the time horizon when

(18:42):
they need these dollars. But evenin general, even if you're not buying
individual bonds, it can be muchmore attractive to be in a bond fund,
and we still do use bond fundsfor our clients, so it can
be much more attractive to be ata bond fund. And I can remember
in those bond funds, they're thesame thing we are right there, you
have, you know, except foryou know, instead of let's say,

(19:04):
you know, five or six bonds, they have thousands of bonds that they're
building out bond portfolios with, andthe yields that you can get in those
bond portfolios can be very attractive,and so they're doing the exact same thing.
Point being is that you know,certainly two years ago to be in
bonds was not that attractive, rightit. As rates were rising so dramatically,

(19:29):
it was not going to be agood thing for an investment perspective.
But now it can be a muchmore attract time to even at least have
some allocation to bonds. And againit depends on your risk tolerance. So
that's where those individual conversations come in. So folks, again, if you
have any other questions, you canreach me at five win eight six nine
zero zero nine eight zero. Againit's five win eight six nine zero zero

(19:55):
nine eight zero. One of thethings I wanted to discuss is so security.
So yesterday I talked about the timingof social security and what is the
best way to do that. Andagain these are discussions that we have their
clients looking at their own personal situationsand there's a number of factors to consider.
But one of the things I wantto highlight in today's discussion is the

(20:15):
COLA cost of living adjustment that youmight expect to see this year. So
last year was one of the largest. I think you have to go back
almost twenty years before you see somethingthis larger, or maybe even longer than
that. It was eight point sevenpercent for two thousand and twenty two,
so very high cost living adjustment,you know, really impacted everybody's Social Security

(20:37):
amount. This year probably something muchless, but still higher than what we've
seen in the past and the priorten years. So you're probably talking about
a cost of living adjustment between twopoint eight to three point two percent.
It will be coming out and they'llbecause more clarification than the next month,
but probably in early October for whatthat will be the thing you have to

(21:00):
remember, so with the cost ofliving adjustment, this not only increases if
you're currently receiving your soiscurity benefit,but also if you're going to receive it
down the road. It actually willbump up your cost of living I'm sorry,
your security benefit when you receive itin the future, so that that's
also an important thing. But thething if to remember is with that cost

(21:21):
of living adjustment that you also haveto cover the increased payment for Medicare,
right, So that's where you're notgoing to get all this money. If
you're current receiving your benefit, you'realso going to have part of this is
going to be covering your premium costfor part B of Medicare. So just
something to be aware of, butlisten to be getting these bump ups in

(21:45):
your security. I mean, evI've been doing this for fifteen years.
When I see how much people gettinginto Social Security, it's increased dramatically up
for certainly in the last three orfour years, and that's a great thing.
Uh. You know, we talkabout some of the challenges that social
Security or Medicare is going to faceover the next ten years, but it
is important to realize that it isa huge part of eighty buddies retirement.

(22:08):
I mean, you think about Idon't care almost who you are without Medicare,
without social Security, most people wouldbe struggling to make their retirement work,
and it's you know, important tounderstand how that's going to come into
play in your plan. And youknow, I just say that, you
listen, somebody, we're gonna haveto make some adjustments to social curity system

(22:30):
and medicare. But it is probablygoing to be younger folks who are going
to be really delaying when they getsoci scurity and also probably paying in more
into the system over time to makethe socicurity system more solid. It is
probably not people who are currently receivingsocicurity who are going to be impacted.

(22:52):
Well, folks, we're gonna goto commercial break. We'll come back and
join us as we take your questionsand give you some insights on your own
personal situation. You'll listen to Let'sTalk Money, brought to you by Bouchet
Financial Group. Why we help prioritizeyour health while we manage your wealth for
life. Come back, folks,as we continue to take your questions and
give your thoughts on your own personalfinancial situation. Welcome back, folks.

(23:17):
For those of you are just joiningus, my name is Martin Shields.
I'm the chief Wealth Advisor at BoucheFinancial Group and I'm your host today for
let's talk money. I'll give mycolleagues Steve Bouche a break, and it's
great to be here with you,dude. Answer any questions you may have.
Now, as they noted earlier inthe show, the hotline is not
working, but you can still reachme. It's just a different number.

(23:38):
You can reach me at five oneeight six nine zero zero nine eight zero.
Again it's five one eight six ninezero zero nine eight zero. And
as I said earlier, I actuallythink it's easier than the hot light number.
So hopefully you'll be able to callin and I can give you some
guidance on your financial planning or investmentmanagement questions. And as I always say,

(24:03):
you know you may be helping yourfellow listener and doing them a favor
by asking the questions that they haveas well. There is no silly question,
there's no stupid question. Folks.Whatever you may have, call in
and I'll give you my guidances towhat you should be doing. So we
talked about the markets being down alittle bit for this week, down about
two percent, and we've got somea couple of important things happening this week

(24:26):
that will give additional guidance for themarkets. So Navidia, which is really
a company that probably most people didn'tknow that much about a year or two
ago, but it's it's a companyin the tech space that's very much into
providing chips in the artificial intelligence area, and they have been up huge this

(24:47):
year. Are part of what's calledthe Magnificent Magnificent Seven, right, these
are seven companies that have done they'rebig tech players and they've done very well
year to date. As we've talkedabout, if you listen to the show
at all, you know that we'rebig believers in technology, both in the
way we operate our firm, butalso from an investment perspective we've had we've

(25:11):
been overweight to technology certainly, andsince I've joined it, I know Steve's
been overweight from even longer than that. And you know the reason for that
is just when you look at youstart talking about what's going to happen over
the next five or ten years,what's gonna be the drivers of the globally
economy, it's pretty safe to saythe technology is going to be an important
part of that. And so froman investment perspective, we want to make

(25:33):
sure our clients have an allocation tothat. And so Navidia came out in
the last earnings and blew everybody away. They raised their guidance by about fifty
percent. They've basically said that youknow, artificial intelligence and the chips they
utilize used to to kind of allowthat to happen had been the demand for
them has been really strong. SoI'd be curious to see what they come

(25:56):
out this week with their guidance andhow earnings are going. That's going to
be a very important part of thatbecause technology has taken a little bit of
a step back since the beginning beginningof August. And you know we've talked
about that. That's part and parcelwith the markets. They they don't always
move up, they do take stepsback. Uh, And just you know,
that's the important thing of being aneducated investor. The other thing that's

(26:18):
going to be going on is JayPowell will be speaking out in Jackson Hole.
Uh. There's a big conference onout there basically where you know,
a lot of the world bankers willbe in Jackson Hole given their thoughts on
the marketing and economy, and soyou know, the marks are going to
look at parse out what he's saying. About interest rates, and you know

(26:42):
where he thinks they need to go. In September, the Federal Reserve will
be meeting again and may raise ratesanother quarter percentage points. They did that
in their last meeting. And youknow, certainly looking at the inflation data
is going to be one of thebiggest drivers, but they're also looking just
at the broad economic data, andif they think that the economy perhaps is

(27:03):
running too hot, that could besomething that uh, you know, forces
them or they may you know,really push them to increase rates by another
quarter percentage points. But you know, if not, they may pause and
wait until November and do that.So you know, we're just going to
have to wait and see again.In general, inflations trending down nicely.

(27:26):
I don't think anybody would have kindof outlined this as well as it's playing
out right now. Again, youdon't want to get too optimistic here,
but to have the economy be asresilient as it is and also have inflation
trending downwards, and what I've talkedabout, there are a number of factors
that are coming to play with that. But you know, certainly you've looked

(27:48):
at the broader economy and you lookat commodity prices, energy prices, oil
and natural gas, they have trendeddown quite nicely. And one of the
big reasons for that, as Imentioned, when you talk about commodity prices,
that's a global market and so it'sa function of supplying demand. And
the issue you had during the COVIDand the pandemic was there was not enough

(28:12):
supply and then coming out of it, there was a strong demand. And
now you're starting to get an equilibrityin that. And that's that's pure economics
there, folks. Is you know, prices get off kilter when supplying demand
do not line up properly. Wherefrom you look at these markets, they
become they go into an equilibrium wheresupplying demand meet each other and it's constantly

(28:37):
moving. There's never a static stateto that. It's always very dynamic.
But really one of the uh,you know, potential challenges but could be
one of the benefits right now isChina and real weakness in the Chinese economy.
And I think as we started theyear, there was expectation that Chinese
economy could have been one of thebright spots. But the problem is just

(28:57):
really more from a structural perspect thatthe Chinese economy has been based so much
on investing in infrastructure and in realestate and not enough on having enough internal
demand. Right, So much ofthe economy for China was based on other
countries and companies at having them buildand provide services for them, and not

(29:22):
enough from internal demand for consumers.And that's the that can contrast it with
the US economy where about seventy toseventy five percent of the economy is from
consumer demand, So huge difference inthat. And so if you've got weakness,
and in particular it's in the realestate market where you see these pictures
of these Chinese cities where just hundredsof skyscrapers have been built and in many

(29:47):
cases not even occupied by people.People just putting their money in there and
buying a condo or putting money intothese buildings and they're not even occupied.
So you can imagine at some pointthat becomes a problem. Right, you
can't had these massive buildings without peoplebeing in there and be able to afford
them. So we'll see what happens, But right now I think it's gonna
it's benefiting our economy to the extentthat it's really providing a deflationary force that

(30:14):
is allowing to our inflation to trenddownwards, and that's going to be very
beneficial to certainly potentially allow the FederalReserve to pause and potentially not raise interest
rates twenty five basis points in September. But we'll have to see exactly how
that plays out. So before thebreak, I've talked about kind of our
role with our clients as educators,as counselors. The other element is as

(30:37):
analyst. Right, so everybody thatworks in the firm is either a CFP
certified Finch Planner or a CPA,and I would say that, you know,
our goal from a management perspective isto hire people I'll say that are
smarter than us. And you knowwe've as I mentioned on the show last

(30:57):
week, we're manage over a billiondollars now for our clients. So we've
grown tremendously and that could be viewedas a negative, but I will tell
you in eleven years I've been atthe firm, it's not the case.
We have been so fortunate to continueto add just amazing individuals and team members
across both our client service team andfrom our advisors and operations that you know,

(31:19):
we are an even better firm thanwe were when I joined eleven years
ago, and I just can't describehow fortunate we are to have such smart
people. But they're great analysts.They really know tax law and regulations very
well, they know estate laws andregulations Arissa, which is in the retirement

(31:40):
space, and just really smart folksfrom an analytical effective and that guidance that
we provide to our clients is reallyimportant. And one of the areas that
want to highlight is with individuals thathave either could be working with private companies
or public companies, but they havestock options or they have company stock.

(32:02):
And when you when you have thosesituations where that's a benefit of yours as
an employee, there's a lot ofcomplexities that exist, and so you know,
probably any given week, we're havingmeetings with more and more clients.
Again, it could be private companiesthat are they've attracted talent by offer them

(32:22):
stock, or it could be publiccompanies that do the same thing, and
there's a lot of decisions they needto make. And I always recommend you
know that people that are in thatcircumstance really work with the investment produciary.
I say it myself. In mytwenties I worked with public companies, and
even though I had a finance background, I didn't have a really good understanding

(32:42):
of stock options, restricted stock,employee stock purchase plans, and the complexity
that exist both from a tax andinvestment perspective. And so when we work
with our clients, you know,we're giving them god is not just you
know, what they need to beaware of from that single stock risk perspective,
but from a tax perspective as well. And one of the areas is
with employee stock purchase plans. Sowith an ESPP, all this is is

(33:07):
it gives employees the opportunity to buycompany stock at a discount. And usually
the way it's set up is there'sa beginning period. Let's say it starts
January first. That's the beginning period. It runs six months, and then
they actually purchase the stock at theend of that six month period. Now
they're going to get a fifteen percentdiscount on the lowest price I'm sorry,

(33:30):
the highest price of either the beginningof January feet or in June thirtieth,
right, So they want to buyas low as they can. And so
if they get a fifteen percent discounton that. What we always give guidance
clients in this situation is, reallyyou want to be buying as much as
you can in that situation, andif you need to buy it one day

(33:52):
and turn around the next day andsell it, because at the very minim
you're going to earn fifteen percent onyour money. Right, So you think
about this. If you can goahead and let's say put ten thousand dollars
in there, you're gonna be buyingthe stock at least a fifteen percent.
It could be more depending on wherethe stock price is, but you turn
around the next day and sell it. Yes, you're gonna have to pay

(34:13):
taxes on that game, but it'sit's a guaranteed fifteen percent as long as
you can turn around the south thenext day. So there are limitations.
You can only put up usually abouttwenty five thousand dollars a year that you
can put through an employee stock purchaseplan, and in general, again for
many people they might need some ofthat as cash flow to you know,

(34:34):
live and pay for daily expenses.But to the extent that you can go
ahead and get that discount and turnaround and sell those positions right away.
It's a huge advantage to them.The other guidance that we usually give with
clients is, you know, appreciatingthe fact that as you get more and
more stock options and restrict to stock, it can't you got more and more

(34:58):
risk with that as well. Right, And many of these companies are very
successful companies. They've done very well, so it could be a larger portion
of your overall investable assets. Andyou want to appreciate the fact that even
though the company is doing well andyou hope that it continues to do well
because you're working there, you're maybegoing to get promotions, You're going to
get more stock. Don't be afraidto sell some of that stock at the

(35:22):
appropriate time depending on your circumstance,as that gets to be a larger and
larger position, because I can tellyou a story after story where people were
with different companies and they thought thatthat company was always going to do well,
they would never possibly have mismanagement orthe industry could change or anything like
that, and it can happen.Right, So, if you're fortunate enough

(35:44):
to have stock options or have restrictedstock and have ownership in your company,
if there's an opportunity over time todiversify out of that. You do want
to take advantage of that in asmart and systematic way, right that it's
got to be systematic and you've gotto watch for both tax situations and there
are a lot of complexities with that, but if you can take that approach,

(36:06):
you're going to be successful with it. And again that's where where our
team comes in giving a lot ofguidance to our clients. And this is
true again for publicly traded companies,but there's more and more clients that we
work with around the country that theyhave stock in privately traded companies could be
like an aesop with like Stewarts orgoal of but it could be just a
startup where as part of their incentivepackage with that privately traded company, they're

(36:31):
getting company stock and you know thegoal with that is if they get bought
out by private equity or if itgoes public, those shares could be worth
a lot of money. But again, you need to have a plan in
place to make sure you manage thatproperly and get the right guidance both from
an investment perspective but also from atax perspective as well again, folks.

(36:52):
If you have any questions, feelfree to give me a call. You
can reach me at five eight sixnine zero zero nine eight zero. Again
it's five one eight six nine zerozero nine eight zero. One of the
things I want to talk about,you know, we use Charl Schwab as
extodian. They're a great partner ofours. As I mentioned on the show

(37:15):
yesterday. We don't pay them anything, they don't pay us anything. What's
great about it too is, youknow, whether it's banking services, or
credit cards or loans, this wholelist of things trust services that they are
clients may need. By having acustodian like Charl Schwab, who we've been
with for twenty five years, andnow with their purchase of TD and Merrit

(37:37):
Trade, they're going to be reallyprobably about just about the largest custodian out
there, certainly in the RIA space, the registered investment advisor space, and
so we feel very fortunate to beable to work with them. But I
do want to highlight the fact thatyou know, we some have times have
prospective clients they're talking with us,and maybe they're talking with the Fidelity or
Vanguard or a Schwab and again,they're they're great inn from the retail side

(38:01):
there, they're a great firm towork with, but there are some clear
differences that you need to be awareof. The first and foremost is,
you know, on the retail side, those big brokench houses, they're not
fiduciaries. And you know that isso important because I think I've seeing this
before and again, I don't wantto be saying too much in a negative

(38:22):
way because there are a lot ofgreat advisors with these firms, but at
the end of the day, theyget compensated differently depending on what they recommend
for you. Right, So ifthey recommend an annuity, or if they
recommend a service that is being offeredby Fidelity or by Schwab, they'll get

(38:42):
get compensated in a different fashion,and that could potentially drive their decision making
a guidance in a way that maynot be in your best interest. So
that's first and foremost. The otherthing that's also important is our firm is
set up for multi generations, right, I mean that isn't important part we're
an employee of firm. Our goalis to be there for our clients for

(39:05):
multiple generations, so that that relationshipthat our clients has with our firm.
Uh, they're going to have that, you know, whether it's them as
they get older and or potentially withtheir sons and daughters or grandkids. And
in many cases it could be situationswe're dealing with parents that have children with
special needs, and that is anarea that we focus on. If you
listen to Steve's this is something that'svery important to Steve. He has had

(39:30):
two brothers with special needs, andso you know, that's that's an area
that we are designed to handle.Our goal is to be there for multiple
generations, whereas if you're dealing withan advisor that's at Fidelity or SWAB,
they may or may not be thereover time and it's going to change.
Right. The other element that Ithink is important is when you start looking

(39:51):
at an organization that is a publiclytraded company versus you know, employee owned
firm like us. At the endof the day, our goal is first
and foremost to take care of ouremployees so that they take care of our
clients in the level that we want. And you know, that's where I've
said it is really amazing how greata team we have that they able to

(40:12):
set up in that way. Butif you're talking with you any firm where
it is a publicly traded company,you have to appreciate the fact that at
the end of the day, thisCEO's responsibility is to take care of shareholder
value first. Now the two shouldline up well, that you take care
of your clients and shareholders, butnot all the time, right, And
we see this in different situations whereit doesn't line up exactly. And so

(40:37):
that at the end of the day, you know, if CEO is making
decisions, they're going to be makingdecisions that maximize shareholder value that may or
may not maximize client value. Whereasyou know, I can say constantly after
eleven years at this firm, andI think in general in the RIA fiduciary
space, that that is the case, that our goal is to maximize our

(40:58):
client's value as a fiduciary. Andthere's a difference. There is a real
difference in that, and I thinkit's something that if you're talking with these
different firms you need to explore alittle bit and kind of be aware of
that. Let's move on to acouple of different topics before we run to
the end of the show. Hereagain, if you have any questions,
you can reach me at five oneeight six nine zero zero nine eight zero

(41:20):
again five one eight six nine zerozero nine eight zero. So one of
the things I want to talk about, it I mentioned yesterday, but it
is so important is cybersecurity. Youhave to make sure that as an individual
and also with the firms that you'reworking with, that they make this a
priority. And I will tell youand we talk about this. I know
with Charles Schwab, you're the protectionof our client's assets and protection of our

(41:45):
clients data, and with our firm, we make this a top priority,
both for training for our team membersand in guidance for our clients. We
just sent out an email to ourclients this week highlighting things that be aware
of from my cybersecurity perspective. AndI was just listening on the radio today
about this individual who just wrote abook who's from Bloomberg, talking about the

(42:09):
scams that are going on with cryptocurrencyand trading on it. And we've seen
this firsthand where individuals get connected withpeople online and they talk about these these
individors talk about how they're great traderswould say cryptocurrency, and that they've made
a lot of money on the tradingpart. And the next thing, you

(42:31):
know, they have build a relationshipwith these individuals and they convince them to
give them money to get invested.And what they do is they show them
that, oh, by the way, I've not only had the invested with
me, but I'm making your money, right, And so they get them
hooked a little bit, and thenthey convince them to give them a little
bit more money and they show themthat in usually via a trading app,

(42:53):
that they're making more money. Andthen the next thing they do they ask
them for a large amount of money. Right, That's that's the step.
And then they ask them for alarge amount of money. And we've seen
this and it's just you've got tobe aware of any situation, whether it's
emails coming in, whether it isaccess to your accounts, or whether it's

(43:15):
phone calls coming in, that youreally take these approach that there's a good
chance that it can be fraudulent andwithout a doubt. You know, our
clients will always check with us onany issues and that's where we can give
them guidances to you know, ifwe have any concerns about it being fraudulent,
and also if they have any issueswhere their their data has been compromised,

(43:37):
we can go ahead and make surethat everything with Schwab is protected.
And that's an invaluable service that weprovide for our clients. We're gonna go
to the phone lines we have StewartStewart are you there? Hello? Hi,
Suret? Are you there? Yes? Can you hear me? I

(43:59):
can? What you have a question? Well, I'm a I'm a family
financial attorney, and I was hopingto ask you to elaborate on something you
said a couple of minutes ago.Okay, Actually, what is it?

(44:24):
Go ahead? Actually you're you seemlike a great guy for taking my call,
But but seriously, I'm not anattorney. I just have a couple
of basic questions. Okay, goahead. Regarding regarding being a victim of

(44:46):
fraud, is there a statue oflimitations for trying to get a prosecution?
Well, why don't I take this, Zach, I'll take this answer this
offline. So that's a great question. I actually don't know. That's probably

(45:07):
more of a legal question as faras prosecution on that. I do know
you know that as soon as youcan identify that there's been fraud that's occurred
to you. Absolutely reach out tothe police on it. That is extremely
important. If the police know,they may see a pattern that may exist.

(45:28):
It could be you know, internationalfraud case, in which case they
could get the FBI involved. Itcould be a local fraud case which I
described on the show yesterday with youknow, some fraud or theft that's been
was occurring in a post office.So if you've been the victim of fraud,
right away, notify your financial institutions, if you're working with an advisor,

(45:52):
and notify them, get them involved. They can give you guidance.
But also do call the police.Call the police and if needed, uh,
you know, they'll meet with youand if they need to get the
FBI involved. There's it's important.But to Stewart's question, I don't know
if there's any statue of limitation.I'm trying to get guidance on it,

(46:13):
but I will tell you that it'sjust very important that you're aware of it.
And you know, I don't wantto have this be to make you
paranoid, but I do want youto be aware of it, right And
I think if you start taking theapproach of you know, if you're getting
a call coming in right away.If it seems too weird or too good
to be true, it probably isright. Just start with that, just

(46:36):
so, just it's about having someidea of you know what to be aware
of and how to protect yourself,and you know anything we can do to
help you. We'll try to dothat. Well, folks. We spend
an hour together and hopefully you'll learna little bit more and you're in a
better situation. As always has beengreat talking with you. I hope you
enjoy your Sunday out there and reallyget get out to enjoy it. You'll

(46:59):
listen to a less talk money,but brought to you by Bruschet Financial Group.
Well, we help our clients withtheir health and manage their wealth for
life. Take care of each otherand take care of yourself, folks,